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Friday, September 23, 2016

The opportunity to benefit from the free trade agreement - necessary Database

(Data: www.vietdatabase.blogspot.com)

After the Free Trade Agreement (FTA) Vietnam - EU Agreement and the Trans-Pacific Partnership (TPP) concluded negotiations and signed, the public often refer to the textile sector, a sector is to is benefiting the most from the FTA, especially from TPP, FTA Vietnam - EU.
TPP commitments agreed to phase out tariffs on textiles Vietnam, some sensitive items will delete the route. The conditions to be entitled to a tax rate of 0% is meet the rules of origin from yarn onward in the exporting country or be calculated from the intra cumulation, for FTA Vietnam - then the rules of the EU Made from fabric.






The tax rate applicable for Vietnam garment exports to the US from 17-18%, 8-12% in the EU, when the TPP, FTA Vietnam - EU force, Vietnam will be the country huge benefit. Because TPP member countries, the EU partners are imported mainly textiles of Vietnam such as: US (40%), EU (13.7%), Japan (10.6%) ...
However, coupled with the above opportunities, textile Vietnam will face many challenges. The biggest shortcomings of Vietnam textile supply chain is sewn material supply, auxiliary input, only meet less than 1% of the demand for cotton, 30% fiber demand. Yarn production of over 1 million tons / year, of which nearly 70% of exports. Fibers used in the country mainly imports (equivalent amount of yarn exports, but higher quality) from China 43%, Korea 20%, Taiwan 15%, only 9.7% TPP countries.
Knitting fabric created about 1.5 billion meters of fabric / year (18% of demand). Meanwhile, imports to 6.7 billion meters of fabric, over 80% of demand, mainly from China, Taiwan, Korea, the TPP countries accounted for only 5.3%.
The strength of Vietnam's textile and garment in stages. However, the processing method is mainly exported, accounting for 70%; method of purchasing raw materials, semi-finished products according to customer specified or self-tapping (FOB FOB I and II) only at about 20%; Product methods including design (ODM) is 9%, and production methods and marketing direct sales at trade centers abroad (OBM) a mere 1%. Therefore, low efficiency and added value of textile and garment exports accounted for only 50%.
Thus, garment exports depend heavily on natural resources, imports raw, but mostly not from the Member States and the Agreement TPP Vietnam - EU.

Methods to help Vietnam's garment market penetration proactive EU
For Vietnam's garment can withstand and thrive in the global value chain, especially in the EU, we should soon have a synchronized system solutions and consistent for the textiles sector.
First, enterprises (companies) Textile Vietnam should select appropriate methods to actively penetrate the distribution channels of the EU market. Specific:

(I) Establish a close relationship, close to the distribution center, large supermarkets in the EU market through the acquisition of Vietnam in the EU, the European Union delegation to Vietnam, the great EU countries' embassies in Vietnam to export directly, minimizing mediated export.
(Ii) Organization of joint ventures in various forms such as use permits, the trademark of the famous trademark. By this mode Vietnam exporters should adopt tactics to buy the trademark of the famous manufacturer in Europe to attach to their products before launching into the EU market. After a time when consumers are accustomed EU initiated branded Vietnam manufacturer's brand alongside the European manufacturer. When the needs of consumers for products with attached two brands started showing signs of rapid growth, the Vietnam manufacturers can peel away the brand of European manufacturers. The economic potential DN Vietnam joint venture could, to become subsidiaries of transnational companies with famous brands of the EU.
Besides the direct export or joint ventures to penetrate export markets EU, Vietnam's garment enterprises should also enhance penetration studies in the form of direct investment to Reduce non-tariff barriers trousers.
(Iii) Promote branding Vietnam garments in the EU market through actively participate in the stalls, fairs and exhibitions abroad, construction of exhibit space domestic market out…
Second, the need to improve the quality of Vietnam textile and garment exports.
Vietnam's garment enterprises should closely inspect the quality of materials, you generate materials for supply stability, good storage materials to avoid down-grade. Besides, the need to comply with strict requirements of the ordering of materials, technologies and manufacturing processes.

Improving the quality of Vietnam textiles in the renewal process and achieved certification for ISO 9000 quality management certificate ISO 14000 environment ... The company does not achieve certification on the need to try harder to get. Because, EU consumers are very interested in and familiar use of quality goods of international standards. So, that textile companies have standards will easily penetrate difficult markets and EU acceptance.
In addition to the standards of international nature, Vietnam's garment enterprises also need to meet both the EU's own standards with such trademark Standard garments based on ISO 3758, the standard of cleaning ISO 3759 is based on, 5077 and 6330; absorbency based on German standards DIN 5411, based on the ISO standard cleaning 3175, assess the level of fiber-based fabric is ruffled British Standard BS 5811 ... These are the standards that customers are very important EU market Center, Vietnam's garment enterprises should pay attention to can meet these requirements.

For enterprises with financial conditions can research and implement additional standards for eco-labeling for products in order to increase competitiveness on the EU market.
Thirdly, linked to domestic companies producing and exporting textiles to the EU.
Vietnam's garment enterprises to link together in the course of business, production and export of textiles. Vietnam has established Vietnam Textile and Apparel Association, founded Corporation Vietnam Textile and later Vietnam Textile and Garment Group. The small and medium enterprises to link together to reduce internal competition between the industry and improve competitiveness on the international market.

Besides the above-mentioned solution, companies need to pay attention to the organization of production, find ways to reduce production costs, the study applies the advanced production technology, management software to improve productivity and competitiveness. Take advantage of opportunities to attract orders, maintenance and efficient exploitation of traditional customers and develop new customers, contributing to stabilizing production and employment security for workers. Focus on building strategic alliances with our customers are the retailers, major importers around the world, participated in the chain link in order to stabilize their orders, customers, access administration experience management, their business ...


References:
1. Statistical Yearbook customs on imported goods Vietnam;
2. Report on the textile sector, Vietnam.
3. www.viettelcargo.com: specialized transportation service providers
4. www.indochinapost.com
5. www.samvietgroup.com

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